What is an annual percentage yield?

Answer by  gk215 (25)

Annual percentage yield is your rate of return from investing for one year, including compounded interest. A bank may offer a stated interest rate that differs from the APY, because the APY assumes all interest paid is reinvested and interest is compounded.

Answer by  Ron27 (465)

An Annual Percentage Yield (apy) is the amount of interest that money will make, compounded according to the bank's policy. For example, if you put $100 into an account that pays 3% interest and has a 3.2% apy, that means that if you leave your $100 in for a year, with compounded interest, you will have $103.20 after a year.